Week Beginning Monday 28th January 2019

THIS MORNING’S LONDON LIFFE WHEAT FUTURES:

  • MARCH 2019 – £170.45/T
  • MAY 2019 – £172.25/T (DOWN £0.40/T ON THE WEEK)
  • NOVEMBER 2019 – £153.75/T (DOWN £2.15/T ON THE WEEK)
  • MAY 2020 – £160.60/T (DOWN £2.20/T ON THE WEEK)

 

POUND Vs EURO – 1.1577 (LAST WEEK – 1.1289)

 

A “generally favourable” weather outlook remains across the Northern Hemisphere and with no major concerns hitting the headlines, the new crop market has continued to drift over the past week. In the short term, sterling has continued to strengthen ahead of tomorrow’s key parliamentary vote on Theresa May’s “Plan B” Brexit strategy.

 

Feed wheat for February collection is just managing to make £170.00/T ex-farm and farmer interest has certainly firmed this morning…. Locking in remaining old crop supplies on farm at this level is beginning to look increasingly appealing. Further forward, £175.00/T ex-farm is achievable for June collection; this represents excellent value against what is currently being bid for spot collection.

Old crop feed barley prices have significantly declined over the past couple of weeks, presumably due to the sheer volume of commercial stocks in stores. With export opportunities virtually non-existent, the availability of old crop feed barley has increased, at a much lower value. Please speak with the office to discuss your requirements.

 

OSR values have retreated to £320.00/T ex-farm this morning as currency pressures continue to burden the market. Sellers holding out for £330.00/T ex-farm are nervous and although the Argentinian soybean harvest is failing to meet initial expectations, it is currently doing very little to alter overall market direction.

 

As for the new crop market, £150.00/T ex-farm is now being offered for November 2019 for the 2019 crop, and January 2021 for the 2020 crop. Again, both look good value alongside the current market.

 

Last week, the International Grains Council (IGC) projected a marginal increase in the global wheat area this season compared to last season, which has added further motivation to the bearish new crop argument.

AHDB have added that there are projected increases in the wheat area for the major exporters of the EU, Russia, Ukraine, the US and Australia. The increases are partially offset by declines in Kazakhstan, Canada and Argentina. There are also small increases to the area in Egypt, Tukey and India, three of the major consumers of global wheat.

It will be interesting to see the USDA figures on the above once the US federal shutdown ceases.

AHDB have reminded that “although it is too early to draw conclusions regarding the size of the 2019/2020 wheat crop – there is an increasing pool of evidence to suggest a big crop could be on the horizon” … perhaps that £150.00/T ex-farm for November doesn’t look so bad after all?

 

In other news, the value of Russian wheat is beginning to firm as the exportable surplus of wheat begins to dwindle. However, the continued lack of US export data


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